Cineworld Group: The world’s second largest cinema chain is in trouble

According to a report from the Wall Street Journal, British company Cineworld Group has spoken with lawyers from Kirkland & Ellis LLP to advise on the bankruptcy process in the United States and the United Kingdom.

The stock has recovered slightly, but is still 60% below its price at the start of Friday trading.

Earlier this week, Cineworld said in a press release that, despite a “gradual recovery in demand” since last spring, take-up was below expectations.

The company blamed a limited number of films for the lack of moviegoers, a situation that is expected to last until the end of November.

The chain, which owns more than 500 movie theaters in the US, is exploring ways to reduce its debt obligations, which it said would “probably lead to a very significant dilution of existing equity interests” for shareholders.

Cineworld struggled to survive during the pandemic, when it had to close its cinemas worldwide. It suffered a loss of $2.7 billion in 2020 and a loss of $566 million in 2021.
It’s a similar story for other movie theaters. According to Comscore, revenue at the US box office so far this year is nearly 30% lower than before the pandemic, despite a major rebound, a media data company.

Cineworld declined to comment to CNN Business about reports that it is considering filing for bankruptcy. Kirkland & Ellis LLP did not immediately respond to CNN Business’s request for comment.

Frank Pallotta contributed to reporting.

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